Kroger plans biggest price cuts in years after Walmart earnings

Kroger is preparing to cut prices on thousands of items, and that is the kind of move that can end up on the sales floor as tighter shelf checks, faster inventory turns and more pressure on managers to protect Walmart’s value image. The company wants lower prices to hit shoppers across categories, while Walmart, Costco and Aldi all sit in the crosshairs of a new grocery price fight.

Kroger chief executive Greg Foran said the company will test reductions first and then roll them out more broadly. Foran, who was named CEO on February 9 and took over in February 2026, said the company plans to fund the cuts through tighter sourcing, simpler operations, cost cuts, direct importing and better use of technology. He said the effort is necessary because “the basket has to come down.”

The pricing push comes after Walmart posted another strong quarter and still chose to sound cautious about the road ahead. Walmart reported first-quarter net sales of $175.7 billion, up 7.1%, and operating income of $7.49 billion, up 5%. But higher fuel costs cut operating income by about $175 million, and chief financial officer John David Rainey warned that if those costs stay elevated, retail price inflation could tick higher in the second quarter and the second half of the year.

For store workers, that combination matters. When Kroger starts leaning on lower prices to win shoppers back from Walmart, Costco and Aldi, the pressure does not stop at the ad circular. It can show up in tighter replenishment, more frequent pricing changes, more scrutiny on shelf availability and less room for mistakes in departments where price perception drives traffic. Walmart kept its full-year forecast intact, with net sales growth expected to run 3.5% to 4.5% and earnings per share projected at $2.75 to $2.85, but investors still punished the cautious outlook.

Kroger had already signaled a softer year in March, forecasting identical sales excluding fuel growth of 1% to 2% and adjusted earnings of $5.10 to $5.30 for fiscal 2026. That outlook included an about 130-basis-point headwind tied to the Inflation Reduction Act. The company also said it plans to open 70 to 80 new stores next year, even as some locations close, while pushing its five Fs: fresh, fast, affordable, friendly and for you. Bloomberg said Kroger owns 21 chains, including City Market and Fred Meyer, giving the chain a broad footprint as it tries to claw back market share.